The case for splitting the cost of having a baby

It has been more than two years since the then-treasurer, Joe Hockey, famously denounced certain child-rearing women as double-dippers.

His comments about women receiving paid parental leave from the government and their employer - on Mother's Day no less - were as memorably misguided in timing as the policy change he was flagging was in substance.

Despite the image of money-hungry rorting mothers depicted by Hockey, I am yet to meet a single parent who has had their bank balance handsomely boosted upon welcoming a small child into the world. Babies have plenty going for them but they're hardly cash-positive.

It was curious not only because just a few months earlier the very same government had been spruiking its intentions to substantially increase paid-leave entitlements. To go from there to hacking into the already-modest entitlements was confusing, but to understand how injudicious that was, it's necessary to understand the policy settings.

At first glance, paid parental leave might appear to be a flagrant luxury, the type of middle-class welfare that simply isn't necessary. Dig into the numbers and the research, however, and it's clear it is an astute investment with social and economic upside.

The reason Westpac introduced paid parental leave back in 1997 - the first Australian corporation to do so - wasn't simply an act of generosity: paying women on maternity leave was a lot cheaper than losing them.

For the government, the economic benefits of providing paid parental leave are twofold - it can grow the tax pool by increasing female workforce participation and deliver long-term savings in health.

That policy provides the primary carer of an infant up to 18 weeks of the minimum wage, currently a little over $670 a week before tax, which can be received in conjunction with any parental leave paid by the parent's employer. Rather than being an oversight, this duality was critical for two reasons.

First, it split the cost between government and business and second, it would help get as many new parents in Australia as possible as close to 26 weeks' paid leave as possible.

The idea of parents being able to receive only one payment was ludicrous, according to Sydney University professor Marian Baird, who was involved in developing the original policy.

"This really undermines the architecture of the scheme and its original philosophy," Baird told Fairfax Media, back in 2015.

"And to now say that mothers are double-dipping is just rude and cruel - it's an outrageous attack on mothers because that was the plan of the scheme."

For context, back in 1970, 47 years ago, an average of 17 weeks of paid leave was available to mothers across OECD countries. By 1990, this had increased to 39 weeks, while by 2014 the OECD average stood at just over one year.